Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 stocks made the list for top value stocks in the Business Support Services industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Latest Business Support Services Stock News

Before choosing which top Business Support Services stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

The fundamental outlook for the business support services industry is neutral. Participants across the sub-industry carry out a wide scope of applications, including payments for goods and services, human resource (HR) payroll processing, and outsourcing. A variety of factors including inflation, pandemic-related impacts and geopolitical tensions have created a difficult set of obstacles for companies to maneuver. However, companies have largely recovered from pandemic-related impacts. Companies overly exposed to consumer groups have experienced larger inflationary pressures. Contractionary measures such as the Federal Reserve continuing to raise interest rates could further dampen consumer spending. It will be important that no other exogenous events emerge, such as intensified geopolitical conflicts disrupting the ongoing recovery in TPV (third party verification), employment levels, etc. Underlying payment economics likely flip to tailwinds as value-added services (VAS) revenue lines help fill the void and provide a “cushion” for upside, especially if other verticals or regions temporarily relax in the interim.

Why Focus on Undervalued Business Support Services Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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6 Undervalued Business Support Services Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the Business Support Services industry for Monday, March 27, 2023. Let’s take a closer look at their individual scores to see how they measure up against each other and the Business Support Services industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

ALJ Regional Holdings, Inc.’s Value Grade

Value Grade:

ALJ Regional Holdings, Inc. is a holding company, which operates through its subsidiary, Faneuil, Inc. (Faneuil). Faneuil provides call center services to commercial and governmental clients across the United States. The Faneuil segment is specialized in designing, implementing managing and operating multichannel customer care, back-office business processing, and solution as a service (SaaS) offerings for government and commercial clients operating in complex, regulated environments nationwide.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

ALJ Regional Holdings, Inc. has a Value Score of 85, which is considered to be undervalued.

When you look at ALJ Regional Holdings, Inc.’s price-to-sales ratio at 0.23 compared to the industry median at 1.75, this company has a lower price relative to revenue compared to its peers. This could make ALJ Regional Holdings, Inc.’s stock more attractive for value investors.

ALJ Regional Holdings, Inc.’s price-earnings ratio is 1.15 compared to the industry median at 21.03. This means it has a lower share price relative to earnings compared to its peers. This could make ALJ Regional Holdings, Inc. more attractive for value investors.

Now, let’s assess ALJ Regional Holdings, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 16.0, when compared to the industry median of 11.1, the company may be considered overvalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. ALJ Regional Holdings, Inc.’s shareholder yield is lower than its industry median ratio of 0.00%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. ALJ Regional Holdings, Inc.’s price-to-book ratio is lower than its industry median ratio of 2.33. This could make ALJ Regional Holdings, Inc. more attractive to investors looking for a new addition to their portfolio.

Geo Group Inc’s Value Grade

Value Grade:

The GEO Group, Inc. is a diversified government service provider. The Company is specialized in designing, financing, development and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. The Company operates through four segments: U.S. Secure Services segment, Electronic Monitoring and Supervision Services segment, Reentry Services segment, and International Services segment. U.S. Secure Services segment primarily encompasses its United States-based public-private partnership secure services business. Electronic Monitoring and Supervision Services segment consists of its electronic monitoring and supervision services in in the United States. Reentry Services segment consists of various community-based and reentry services. International Services segment primarily consists of its public-private partnership secure services operations in Australia and South Africa.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Geo Group Inc has a Value Score of 89, which is considered to be undervalued.

Geo Group Inc’s price-earnings ratio is 6.6 compared to the industry median at 21.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Geo Group Inc more attractive for value investors.

Geo Group Inc’s price-to-book ratio is higher than its peers. This could make Geo Group Inc less attractive for value investors when compared to the industry median at 2.33.

You can read more about Geo Group Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Herc Holdings Inc’s Value Grade

Value Grade:

Herc Holdings Inc. is an equipment rental supplier. The Company offers a portfolio of equipment for rent. In addition to its principal business of equipment rental, the Company sells used equipment and contractor supplies such as construction consumables, tools, small equipment and safety supplies; provides repair, maintenance, equipment management services and safety training to certain of its customers; offers equipment re-rental services and provides on-site support to its customers, and provides ancillary services such as equipment transport, rental protection, cleaning, refueling and labor. Its fleet includes aerial, earthmoving, material handling, trucks and trailers, air compressors, compaction and lighting. Its ProContractor business focuses on professional-grade tools and equipment, and offers industry-specific solutions-based services, which include power generation, climate control, remediation and restoration, pumps, trench shoring, studio and production equipment.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Herc Holdings Inc has a Value Score of 78, which is considered to be undervalued.

Herc Holdings Inc’s price-earnings ratio is 9.7 compared to the industry median at 21.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Herc Holdings Inc more attractive for value investors.

Herc Holdings Inc’s price-to-book ratio is lower than its peers. This could make Herc Holdings Inc more attractive for value investors when compared to the industry median at 2.33.

You can read more about Herc Holdings Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

PagSeguro Digital Ltd’s Value Grade

Value Grade:

PagSeguro Digital Ltd. is a holding company. The Company, through its subsidiaries, is engaged in providing financial technology solutions and services and corresponding related activities, focused principally on micro-merchants and small and medium-sized businesses (SMEs). The Company offers a two-sided ecosystem, providing a banking and payments experience through a single interface, with one app, one platform and one customer support. It owns two brands: PagBank and PagSeguro. PagBank provides a safe way of owning a free digital account, linked to the Brazilian Central Bank?s platform, with the feature of accepting payments, where its clients can transact and manage their cash, have a debit or credit card, save money and find a portfolio of investments available. PagSeguro?s end-to-end payments ecosystem enables its customers to accept a range of online and in-person payment methods, including credit cards, debit cards, meal voucher cards, boletos, bank transfers, and cash deposits.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

PagSeguro Digital Ltd has a Value Score of 88, which is considered to be undervalued.

PagSeguro Digital Ltd’s price-earnings ratio is 9.2 compared to the industry median at 21.0. This means that it has a lower price relative to its earnings compared to its peers. This makes PagSeguro Digital Ltd more attractive for value investors.

PagSeguro Digital Ltd’s price-to-book ratio is higher than its peers. This could make PagSeguro Digital Ltd less attractive for value investors when compared to the industry median at 2.33.

You can read more about PagSeguro Digital Ltd’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

TuanChe Ltd (ADR)’s Value Grade

Value Grade:

TuanChe Limited is a China-based company that mainly provides a scalable omni-channel automotive marketplace approach to automotive marketing and distribution. The Company mainly provides offline marketing solutions, referral service for commercial bank and online marketing services and others. The Company offers marketing solutions by integrating our online platform and offline sales events. Its online platform, which consists of its tuanche.com website, apps, official WeChat account, WeChat mini-programs, Cheshangtong, and other mobile outlets, serves as a platform for consumer acquisition and management.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

TuanChe Ltd (ADR) has a Value Score of 85, which is considered to be undervalued.

TuanChe Ltd (ADR)’s price-to-book ratio is higher than its peers. This could make TuanChe Ltd (ADR) less attractive for value investors when compared to the industry median at 2.33.

You can read more about TuanChe Ltd (ADR)’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Willis Lease Finance Corporation’s Value Grade

Value Grade:

Willis Lease Finance Corporation along with its subsidiaries, is a lessor and servicer of commercial aircraft and aircraft engines. The Company operates through two segments: Leasing and Related Operations, and Spare Parts Sales. The Leasing and Related Operations segment involves acquiring and leasing, primarily pursuant to operating leases, commercial aircraft, aircraft engines and other aircraft equipment and the selective purchase and resale of commercial aircraft engines and other aircraft equipment and other related businesses. The Spare Parts Sales segment involves the purchase and resale of after-market engine parts, whole engines, engine modules and portable aircraft components. It enables the Company to provide end-of-life solutions for surplus aircraft and engines, as well as manage the full lifecycle of its lease assets. The Company’s subsidiaries include WEST Engine Funding LLC, Willis Aeronautical Services, Inc. and Willis Asset Management Limited.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Willis Lease Finance Corporation has a Value Score of 69, which is considered to be undervalued.

Willis Lease Finance Corporation’s price-to-book ratio is higher than its peers. This could make Willis Lease Finance Corporation less attractive for value investors when compared to the industry median at 2.33.

You can read more about Willis Lease Finance Corporation’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Business Support Services Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Business Support Services stocks as well as other industrys.

Choosing Which of the 6 Best Business Support Services Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• ALJ Regional Holdings, Inc. stock has a Value Grade of A.
• Geo Group Inc stock has a Value Grade of A.
• Herc Holdings Inc stock has a Value Grade of B.
• PagSeguro Digital Ltd stock has a Value Grade of A.
• TuanChe Ltd (ADR) stock has a Value Grade of A.
• Willis Lease Finance Corporation stock has a Value Grade of B.

Now that you have a bit more background about each of the 6 undervalued stocks in the Business Support Services industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Business Support Services Stocks

Want to learn more about Business Support Services stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 6 Undervalued Business Support Services Stocks for Monday, March 27
• 6 Undervalued Business Support Services Stocks for Friday, March 24
• Why Brink's Company’s (BCO) Stock Is Up 5.67%
• Why Healthcare Services Group, Inc.’s (HCSG) Stock Is Up 4.77%

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